Drop in Preliminary August Manufacturing Data the Latest Sign of Sluggishness

SHENZHEN, China—China's economy faces an uphill battle for the rest of 2014, adding pressure on Beijing to step up government spending or free up money to spur growth.

The latest sign of sluggishness came Thursday, when preliminary August manufacturing data showed an unexpectedly sharp drop in growth. It follows other signs of a slowdown in July, including weak domestic investment demand, a sharp drop in credit and a third...